Tribunal held that LIBOR, even amongst independent banks, cannot always be rate at which intra-bank transactions must take place and it cannot be open to TPO to reject independent party transactions, which are valid input for application of Comparable Uncontrolled Price Method, simply because transactions are entered at a rate higher than LIBOR. (AY. 2012-13 to 2015-16 )
Shinhan Bank v. DCIT (IT) (2023) 198 ITD 453 (Mum)(Trib.)
S. 92C : Transfer pricing-Arm’s length price-Avoidance of tax-International transaction-Specified domestic transaction-LIBOR-CUP method-Interest-Interbank transactions-TPO cannot reject independent party transactions, which are valid input for application of CUP Method, simply because transactions are entered at a rate higher than LIBOR.